Beijing has a powerful tool for responding to President-elect Donald J. Trump's threatened new tariffs on Chinese goods: It could start a currency war.
Letting China's currency, the renminbi, lose value against the dollar would be a tried and true answer to tariffs, making Chinese exports less expensive.
A cheaper renminbi could partially or entirely offset the effects of the extra 10 percent tariff on Chinese goods that Mr. Trump said he would order.
However, allowing China's currency to fall could jeopardize the economy, leading Chinese companies to shift money out of the country, undermining consumer confidence.
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